TechFlow, July 30 — According to the Hong Kong Wen Wei Po, the Accounting and Financial Reporting Council (AFRC) released its "Inspection Report 2024-25" and "Investigation Report 2024-25." AFRC Inspection Department Head Lau Kin Yu stated that companies involved in virtual asset trading, as emerging industry players, will be among this year's inspection targets.
The reports indicate that auditors currently face challenges including verifying ownership and existence of virtual assets, complexities in valuation, heightened fraud risks, and the lack of unified accounting standards for virtual assets. Review findings show that enterprises have insufficient understanding of business models, control activities, and risks related to virtual assets; have failed to assess and address the design and effectiveness of internal controls regarding virtual asset transactions and custody of clients' virtual assets; and have not designed or implemented sufficient audit procedures to verify ownership, occurrence of hash transactions, and valuation of virtual assets.
